China’s promise to ease restrictions on rare earth exports under President Trump’s revived trade truce is quickly turning into another test of Beijing’s willingness to honor its word. While Chinese authorities pledged during talks in London to loosen export controls and lower tariffs on U.S. goods to 10%, American manufacturers are reporting that the flow of critical materials has barely improved.
“Yes, the export restrictions have been paused on paper. However, ground reality is completely different,” Neha Mukherjee, a rare-earths analyst at Benchmark Mineral Intelligence, told The Wall Street Journal. She described China’s licensing process as a “bureaucratic drag,” where paperwork moves at a crawl while factories in the U.S. scramble to avoid shutdowns.
Between 2020 and 2023, China provided around 70% of America’s rare earth imports, according to the U.S. Geological Survey, and it holds 44 million tons in reserves compared to just 1.9 million tons held by the United States. These minerals are essential for everything from defense systems to electric vehicles, and Trump’s team has made clear that reducing dependence on Beijing’s supply chains is a core national security goal.
Beijing initially clamped down on exports in April in retaliation for Trump’s “Liberation Day” tariffs on Chinese goods. Now, even after the agreement struck in Geneva and London, American companies are operating “hand-to-mouth” as shipments crawl through red tape, forcing some to pay steep premiums for airfreight to keep assembly lines running.
Ford, for example, has reportedly halted production of its Explorer SUV in Chicago due to the rare earth shortage, underscoring the real-world stakes of a supply squeeze many warned would come if China used its mineral dominance as a bargaining chip.
China’s Ministry of Commerce insists it is “accelerating” the review of export license applications and has approved “a certain number” of them. But companies tell a different story, saying applications now take over a month and are often rejected outright if firms skip questions that seek confidential customer lists and product designs — a chilling prospect given China’s record on intellectual property theft.
Even when licenses are granted, it’s reportedly the companies tied closely to the Chinese government that are getting them first, creating a competitive disadvantage for smaller or foreign firms trying to maintain a consistent supply chain.
The Trump administration is watching closely. “The Geneva and London talks made solid progress towards establishing reciprocal trade relations with China. The Administration continues to monitor China’s compliance with the agreement reached at Geneva,” a White House official told the Daily Caller News Foundation.
But patience may not last forever. Sources close to the administration indicate that if China continues to stall on fulfilling its promises, additional pressure could come through targeted tariffs or sanctions on entities involved in blocking rare earth exports.
Critics of the administration’s tariffs have long argued they would fuel inflation, but Amazon and other major retailers have reported they’ve largely absorbed the costs, blunting the inflationary impact many economists predicted. Now, the same critics are watching to see whether Trump’s hardball trade tactics can break China’s grip on rare earth supplies without triggering wider economic pain at home.
Meanwhile, manufacturers are exploring alternative sources in Australia, the U.S., and Africa, but building out those supply chains takes time and investment — something Beijing’s stalling may be designed to test.
For now, the fight over rare earth minerals is a microcosm of the broader U.S.-China economic standoff: one side promising cooperation, the other side demanding proof, all while American workers and industries wait for certainty.